What is parallel simulation in the context of auditing?

In the context of auditing, parallel simulation refers to the technique of simulating key application processes to reprocess actual transactions. This method allows auditors to evaluate the accuracy and completeness of the information produced by an accounting system. By reprocessing these transactions, auditors can compare the results generated by the original system with those produced by the simulation. This comparison can highlight discrepancies, allowing auditors to identify errors or issues in the system's processing capabilities.

The focus is on ensuring that the application processes function correctly by producing consistent and accurate results when applied to the same set of transactions. This type of simulation can provide a robust level of assurance regarding the integrity of the data and the effectiveness of controls within the system used for accounting purposes.